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Bloomberg: Silicon Valley ‘Bloodbath’ Leaves Entire Office Buildings Empty

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posted on Jan, 5 2010 @ 01:30 PM
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www.bloomberg.com...



Silicon Valley ‘Bloodbath’ Leaves Entire Office Buildings Empty

By Dan Levy

Jan. 5 (Bloomberg) -- Silicon Valley is beset by the biggest office property glut since the dot-com bust, leaving the U.S. technology hub with empty high-rises and office parks that make it impossible for landlords to sustain average rents.

More than 43 million square feet (4 million square meters) -- the equivalent of 15 Empire State Buildings -- stood vacant at the end of the third quarter, the most in almost five years, according to CB Richard Ellis Group Inc. San Jose, Sunnyvale and Palo Alto have 11 empty office buildings with about 3 million square feet of the best quality space.

“There is a bubble bursting in much the same way as the residential market burst,” said Jon Haveman, principal at Beacon Economics, a consulting firm in San Rafael, California. “None of those towers will fill up anytime soon.”

Unemployment in the San Jose-Sunnyvale-Santa Clara metro area that includes Silicon Valley was 11.8 percent in November, down from the August record of 12.1 percent, according to California’s Employment Development Department. Applied Materials Inc. and Sun Microsystems Inc. in Santa Clara and Adobe Systems Inc. in San Jose announced more than 5,000 job cuts since October amid falling sales of computer chips, software and equipment.

Commercial property foreclosures will at least double in 2010 and job growth won’t return for two years after that, held back by U.S. consumers who are saving more and “getting back in line with sustainable spending habits,” Haveman said.

Domino Effect

Bloated inventory and tight lending standards will curtail office construction in pockets around California for “the next several years,” said Jack Kyser, founding economist of the Kyser Center for Economic Research at the Los Angeles Economic Development Corp.

“That means there won’t be jobs for construction workers and hence no tax revenue from sales of construction materials,” Kyser said. “It is the ultimate domino effect.”

...
Silicon Valley is in the “early innings” of a commercial property shakeout, said Erik Doyle, president of Cornish & Carey Commercial, a property brokerage in Santa Clara.
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More at link...




posted on Jan, 5 2010 @ 01:32 PM
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Just when you think that '2010 will be better than 2009', 'tech is leading the way', etc..

Commercial property is in the early stages of sinking. This is going to sting a little and keep stinging for some time.



posted on Jan, 5 2010 @ 01:34 PM
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Many have predicted this tsunami.

I'm hoping for the best, but expecting the worst.

Hang on to your seats folks.... It's likely to get really ugly.



posted on Jan, 5 2010 @ 01:39 PM
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Originally posted by Dbriefed
Just when you think that '2010 will be better than 2009', 'tech is leading the way', etc..

Commercial property is in the early stages of sinking. This is going to sting a little and keep stinging for some time.


STING??????????????? LMAO! STING????????????????? WOW! The US economy is on LIFE SUPPORT! I mean my god! I think the average US person is down right clueless. People are still acting like we caught an "economic cold" so to speak. We didn't catch a cold people..........we HAVE BEEN DIAGNOSED WITH STAGE IV cancer!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

While Obama is off vacationing in Hawaii and arguing about our failed intelligence...............the US is in economic crisis.



posted on Jan, 5 2010 @ 06:13 PM
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reply to post by Zosynspiracy
 


It can't be Obama said it was fixed, the MSM said it was fixed. You don't mean they "gasp" lied?



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